Health care: Some agreement, then there's the public option

WASHINGTON -- Congress is poised to begin a historic debate on the future of the nation's health care system, but while most Democrats agree a new public plan is needed, its fate is far from certain.

The House of Representatives could begin consideration of its plan, whose net cost is an estimated $894 billion, late next week.

The Senate is also expected to begin debate soon. Its timetable is uncertain since it takes 60 votes to overcome procedural hurdles, and there are questions whether Democratic leaders have enough strength yet to go forward.

This much is clear: Democratic leaders, with the strong backing of President Barack Obama, will put their muscle squarely behind the creation of a new government-run health care system, or public option.

There are many similarities between what House and Senate Democratic leaders are pushing. Most people would have to obtain coverage and could use a new "exchange," or marketplace, to compare rates and benefits. Lower income consumers would get government help.

Reimbursement rates for doctors, hospitals and other health care providers would be negotiated by the government, a key concession to lawmakers in rural states. Leaders had wanted rates tied to Medicare fees.

Even agreeing to those points is a significant milestone, one virtually unmatched in the tortured history of health care politics.

"We are one step further on a long, hard road," said House Majority Leader Steny Hoyer, D-Md.

There are other points where virtually everyone agrees. Insurers would be barred from denying coverage because of pre-existing conditions. They no longer would be allowed to base rates on gender, ending the long-standing practice of charging women of child-bearing age more than men. Insurers also would be limited as to how much more they could charge someone because of age.

Before any of that becomes law, however, there are significant differences that need to be worked out.

The most prominent divide involves details of the public option.

Nationally, support is strong but not overwhelming, and polls often differ widely, depending on how the question is asked. In an Oct. 22-25 NBC News/Wall Street Journal poll, 48 percent said they favored a "public health plan administered by the federal government" while 42 percent were opposed. In an Oct. 15-28 ABC News/Washington Post poll, however, 57 percent said they favored "having the government create a new health insurance plan to compete with private health insurance plans."

Senate Majority Leader Harry Reid, D-Nev., last week said he'd move ahead with a plan that allows states to opt out within the first year, but that's failed so far to stir the eight to 12 moderates whose votes are crucial.

Gaining support is the idea of a "trigger," where the public option only would be permitted if private insurers fail to lower costs. There are lots of other ideas, however.

Sen. Ben Nelson, D-Neb., for instance, likes the idea of state-created, state-run and designed public options that could get federal start-up aid and might be subject to federal rules.

In the House, though, leaders are pushing for a public option without any such conditions, even though many of the 52 Blue Dog, or conservative, Democrats have said they were still studying the bill.

Rep. John Larson, D-Conn., the chairman of the House Democratic Caucus, predicted his chamber would approve the nationwide public option. Democrats control 256 seats and need 218 to pass the legislation.

However, when Rep. Chris Van Hollen, D-Md., a top leadership strategist, was asked if he could eventually support opt-out or a trigger, he said, "We're not necessarily opposed to what the Senate's talking about."

The other major flashpoint involves taxes. House leaders had wanted an income tax increase on individuals with adjusted gross incomes of more than $280,000 and joint filers earning more than $350,000.

Under pressure from moderates, who are concerned that small business owners would be hit hard, those limits were adjusted to $500,000 and $1 million.

Most Senate Democrats prefer the Senate Finance Committee plan that has insurers paying an excise tax on individual policies valued at more than $8,000 and family policies at more than $21,000.

However, House Democrats and some experts think health care costs will go up faster than the rate of inflation and, if insurers pass on the tax to consumers, people will be have some big tax bills in the future.

"More and more people could get swept in over time," said David Walker, chief executive officer of the Peter G. Peterson Foundation, which studies health costs.

Larson said that would be a tough sell in the House. "Take a look at our membership," he said, which tends to be dominated by liberals who have long favored higher income tax rates on the wealthy. "I'd say they strongly favor the House alternative."

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